By Tom Baugher
On January 16, I hosted a presentation on how to protect yourself from tax fraud. I invited a supervisor from the Internal Revenue Service-Criminal Investigative Division (IRS-CID) to discuss this topic. (In my past career, I worked very closely on several high-dollar investment frauds with IRS-CID and had two IRS-CID agents assigned to my office’s Economic Crime Task Force). Here are some of the tips we discussed.
To begin, tax fraud and identity theft occurs when a criminal uses your “personally identifiable information” (PII) to file a return in your name. There are many ways a criminal can obtain your PII. Sometimes they have a confederate who works for a business that routinely collects customers or patients PII. Other times, they obtain your information from a data breach (cyber intrusion) of a large retail or credit card company.
For those who have taken my prior trainings either in-person or via Zoom, you have heard me talk about the importance of reducing your vulnerabilities – even if you cannot completely eliminate a threat. This advice is equally valid when protecting yourself against fraud. Below are simple, yet effective, things you can do to make it harder for a criminal to adversely impact you.
You can obtain an Identity Protection PIN from the IRS. This PIN prevents someone else from filing a tax return using your Social Security Number or Individual Taxpayer Identification Number.
File your tax return early. Because the IRS takes action on returns as they come in, Stolen Identity Refund Fraud relies on the criminal filing before you.
If you use a tax preparer, ensure they are legitimate. Every year unsuspecting people are victims of unscrupulous tax preparers. The IRS website, the American Institute of Certified Public Accountants, and several other professional organizations list their accredited members.
Protect your information. Use a shredder at home to dispose of letters and documents containing PII. Only use secure portals for email correspondence with attorneys and realtors.
If you feel you have been a victim of tax fraud, file a police report at the official IRS website.
To Obtain IRS Protection Pin Report Fraud